Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- 49.90% is the gross profit margin for NEWMONT MINING CORP which we consider to be strong. Regardless of NEM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NEM's net profit margin of 14.46% significantly outperformed against the industry.
- The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.84 is somewhat weak and could be cause for future problems.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.77%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 43.24% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Net operating cash flow has decreased to $433.00 million or 28.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company's assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Mexico, and New Zealand. Newmont has a market cap of $15.7 billion and is part of the basic materials sector and metals & mining industry. The company has a P/E ratio of 10.00, below the S&P 500 P/E ratio of 18.00. Shares are down 30.6% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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